Adoption & Implementation News

Were Estimates of ICD-10 Implementation Costs Miscalculated?

A team of researchers explains how previous ICD-10 implementation cost estimates were higher than their own.

November 13, 2014 - A recent survey of small physician practices and published reports has led a team of researchers to dispute the accuracy of ICD-10 implementation cost estimates from a popular and widely referenced report published several years ago.

“The new data suggests that the estimated costs, time and resources required by physician offices are dramatically lower than initially estimated as a result of readily available free and low cost solutions offered by coding, education and software vendors,” write Kravis et al. in the Journal of AHIMA.

The authors estimate the costs for small physician practices to convert to ICD-10 to fall between $1,960 and $5,900, a fraction of the estimate reported by 2014 and 2008 reports by Nachimson Advisors to the American Medical Association (AMA) ranging from $22,560 to $105,506.

“There are a number of reasons why the cost estimates reported in this article are lower,” Kravis et al. maintain. “The costs related to EHR adoption and other healthcare initiatives, like meaningful use are not directly related to the ICD-10 conversion although these costs were sometimes included in ICD-10 conversion cost estimates. The coding industry is much more knowledgeable and ready for ICD-10 now than previously reported.”

Software upgrade costs: Increases in EHR adoption as a result of meaningful use and the work of EHR vendors to support ICD-10 software updates are preventing physician practices from having to purchase and implement new or additional technology to complete the ICD-10 transition.

Super bill conversion: Researchers find little difference between the work required by ICD-9 and ICD-10 to update super bills. Additionally, the availability of free-to-download super bills for the most common diagnosis codes is also driving down ICD-10 implementation costs.

End-to-end testing: Kravis et al. contend that the primary responsibility for testing lies with billing, EMR, and clearinghouse vendors, not physicians. “Many providers have already completed testing with one quarter reporting that they had tested with multiple payers and that the required time if any for internal and external testing with clearinghouses are not the main drivers of cost,” they write.

Productivity: A “fundamental problem” identified by researcher in previous estimates was the use of data from inpatient hospitals to calculate cost of potential disruption in day-to-day activities caused by ICD-10 for all types of providers, including physician practices.

“Since the new estimates of the costs for ICD-10 preparation are much lower than originally estimated, the barriers to ICD- 10 implementation are much less than originally projected,” the authors conclude.

As James Libecco, MD, a single practitioner at Akron Skin Center in Ohio, told EHRIntelligence.com earlier this week, assumptions about a lack of ICD-10 readiness among physician practices paints the wrong picture.

“Unfortunately, this is teaching us now in medicine is apathy is your best bet,” he maintained. “Just ignore it and if it ever happens, then great you’ll move on. It goes to penalize those who made the effort to get ready last time.”